The best online investing platforms for federal employees are brokerages, real estate platforms, and alternative asset apps that complement the Thrift Savings Plan (TSP) by filling asset-class gaps the government plan cannot cover. Federal employees have access to one of the strongest retirement systems in the country: a Thrift Savings Plan (TSP) with 0.05% expense ratios, a FERS pension providing a lifetime inflation-adjusted annuity, and Social Security.
But the TSP carries a gap: zero real estate exposure. The TSP’s five-fund menu offers no REITs, property funds, or rental income options. A new generation of online investing platforms for federal employees fills that void. This guide compares the best platforms, from low-cost brokerages to fractional real estate, so federal employees can build a complete portfolio around their TSP.
Key Takeaways
- Federal employees should max the TSP to the 5% agency match before any other investment, then layer in a Roth IRA, HSA, and a taxable brokerage or real estate platform.
- TSP 2026 contribution limits are $24,500 for elective deferrals, with $8,000 catch-up (age 50+) and $11,250 enhanced catch-up (ages 60-63).
- Fidelity, Schwab, and Vanguard offer lower-cost index funds than the TSP C Fund, specifically FXAIX at 0.015% vs TSP C Fund at 0.036%.
- The TSP has no direct real estate exposure, making fractional real estate platforms a natural complement for federal employees seeking property income.
- Ark7 offers fractional shares of individual rental properties starting at $20 with monthly dividend distributions and a regulated secondary market.
- A stacking strategy, TSP first then IRA then HSA then taxable alternatives, maximizes tax advantages while diversifying into real estate.
New to passive real estate investing?
Explore Ark7 OpportunitiesWhy Federal Employees Need Outside Investing Platforms
Federal employees operate under a unique financial structure. The FERS pension provides a guaranteed, inflation-adjusted lifetime annuity based on years of service and high-3 average salary. That pension acts like a bond-like income stream in retirement, which means federal employees can afford to invest more aggressively in their TSP than private-sector workers with no pension.
The TSP itself is a powerful tool. Its five core funds, G (government securities), F (bonds), C (large-cap stocks), S (small/mid-cap stocks), and I (international stocks), carry a blended expense ratio of 0.05%, among the lowest in the industry. But those five funds represent the entire menu. There is no emerging markets fund, no commodities, no sector funds, no individual stocks, and no real estate investment trust (REIT) option.
The Mutual Fund Window was intended to solve this, but it charges $132 per year in platform fees plus $28.75 per trade. Only 0.08% of TSP participants use it, per TSP.gov’s Mutual Fund Window page. The TSP also restricts participants to two interfund transfers per month (unlimited into the G Fund), limiting tactical allocation during volatile markets.
These constraints create a clear need: federal employees can use outside investing platforms to fill the gaps their TSP leaves open, particularly in real estate and alternative assets.
TSP Foundation: Maxing Out 2026 Contributions First
The TSP is the foundation of every federal employee’s retirement plan. In 2026, participants can contribute up to $24,500 in elective deferrals, and the baseline strategy starts with contributing enough to receive the full agency match at 5% of salary.
2026 TSP Contribution Limits
| Contribution Type | Limit | Eligibility |
|---|---|---|
| Elective deferral (standard) | $24,500 | All participants |
| Catch-up (ages 50-59, 64+) | $8,000 | Age 50+ |
| Enhanced catch-up (ages 60-63) | $11,250 | Ages 60-63 |
| Maximum annual additions | $72,000 | Including agency match and after-tax |
| Agency match | 5% of salary | All FERS employees |
Source: TSP Bulletin 25-3
SECURE 2.0 Changes Effective 2026
Several SECURE 2.0 provisions took effect in 2026 that affect federal employees, per the TSP’s official SECURE 2.0 page:
- Mandatory Roth catch-up: If prior-year wages exceeded $150,000, catch-up contributions must be made as Roth (after-tax) rather than traditional pre-tax.
- Roth RMD elimination: Roth TSP balances are no longer subject to Required Minimum Distributions during the account holder’s lifetime.
- In-plan Roth conversions: Available as of January 28, 2026, through the My Account portal.
The G Fund Advantage
The TSP G Fund invests in short-term U.S. Treasury securities and carries a unique feature no private-sector platform can replicate: it pays intermediate-term interest rates with zero principal risk. The G Fund’s principal is guaranteed by the U.S. government, and interest accrues daily with no price fluctuation. It is the single best reason to keep at least some money in the TSP even after retirement.
Best Online Investing Platforms: Top Brokerages
- Ark7: Best for fractional real estate exposure. Buy shares of individual rental properties starting at $20 with monthly dividends, zero AUM fees, and a regulated secondary market. The only platform filling the TSP’s real estate gap.
- Fidelity: Best overall brokerage for federal employees. Lowest-cost TSP-equivalent funds like FXAIX at 0.015%, zero-commission stock and ETF trades, $0 account minimum, top-rated mobile app (NerdWallet #1 2026).
- Charles Schwab: Best for customer service and investor education. SWPPX at 0.020%, thinkorswim trading platform, Investopedia Best for Investor Education 2026, and Forbes #1 overall broker.
- Vanguard: Best for passive buy-and-hold investors. Industry’s best cash sweep rates (VMFXX has yielded approximately 3.5-3.6% in 2026), VOO at 0.03%, and a philosophy that mirrors the TSP’s low-cost approach.
- Fundrise: Best for broad alternative diversification. $10 minimum, manages $1 billion+ across real estate, private credit, and venture capital funds with KPMG-audited financials.
- Arrived: Best for curated single-family rental properties. Backed by Jeff Bezos and Marc Benioff, 974,000+ registered investors, individual property selection with a maturing secondary market.
Three brokerages stand out for federal employees looking to supplement their TSP: Fidelity, Charles Schwab, and Vanguard. Fidelity’s FXAIX index fund at 0.015% costs less than half the TSP C Fund, and Schwab’s SWPPX at 0.020% is similarly competitive.
| Broker | Key Differentiator | Attribute | Top Index Fund ER |
|---|---|---|---|
| Fidelity | Lowest-cost TSP-equivalent funds, NerdWallet Best Investing App 2026, J.D. Power #1 customer service | TSP fund replication at lower cost | FXAIX at 0.015% |
| Charles Schwab | thinkorswim platform, SWPPX at 0.020%, Investopedia Best for Investor Education 2026 | Investor education resources | SWPPX at 0.020% |
| Vanguard | Best cash sweep (VMFXX ~3.5-3.6%), but no fractional shares | Buy-and-hold passive index funds | VOO at 0.03% |
Fidelity also offers fractional shares, zero-commission stock and ETF trades, and a $0 account minimum.
Schwab’s SWPPX at 0.020% is similarly competitive, and Schwab’s thinkorswim platform provides sophisticated charting and analysis tools. Vanguard offers the industry’s best cash sweep rates (VMFXX has yielded approximately 3.5-3.6% in 2026), though it does not offer fractional shares and charges a $20 annual fee (waived with e-delivery enrollment). Federal employees who want to invest directly in real estate can follow a fractional real estate investing how-to guide to get started.
1. Ark7
Ark7 lets investors buy fractional shares of individual rental properties starting at $20 per share. The platform handles all property management, including tenant screening, maintenance, and rent collection, and distributes monthly dividends on the 3rd of each month. Ark7 is an SEC-qualified platform offering shares in single-family homes and multifamily properties across the United States. With 300,000+ active investors and $30 million+ in property value funded, Ark7 serves federal employees looking to add real estate exposure the TSP cannot provide, as detailed on Ark7’s investor page.
What sets Ark7 apart
- $20 minimum investment. The lowest entry point in the industry for single-property selection. Federal employees can start building real estate exposure for less than a dinner out. (Source: Ark7 FAQ)
- Monthly dividend distributions. Dividends are paid on the 3rd of each month, more frequent than the quarterly payments most competitors offer.
- Zero AUM fees. Ark7 charges no ongoing asset management fee. On a $10,000 investment held five years, that saves approximately $500+ compared to platforms charging 1% annually.
- SEC-registered secondary market (PPEX ATS via North Capital). After a 12-month holding period, investors can trade shares on a regulated exchange. In May 2026, the secondary market processed $325,150 in transactions across 31 properties (70% of the portfolio actively trading).
- Property-level transparency. Each property lists detailed financial data, including projected returns, actual rental income, occupancy rates, and expense breakdowns. Investors pick specific properties rather than pooled blind funds.
- IRA option. Roth and Traditional IRA investing is available for $100 per year per property, capped at $400 annually. This lets federal employees invest pre-tax or after-tax retirement funds in real estate.
- Transparent fee structure. Ark7 charges a 3% sourcing fee and 8-15% property management fee on rental income with zero AUM fees. All fees are disclosed on each property’s financial page.
- Top-performing properties. The Urbana-S11 property yielded 7.54% annualized with 31% price appreciation as of May 2026 (past performance does not guarantee future results).
Federal employee proof points
Pat H., a Strategic Planner at a Federal Law Enforcement Agency, uses Ark7 to access real estate without becoming a landlord. “Fractional shares in professionally managed properties is a perfect answer to my dilemma,” Pat says. For federal employees who cannot actively manage rental properties due to security clearances, travel requirements, or time constraints, the platform provides direct real estate exposure without management duties.
In May 2026, Ark7 distributed $88,474.79 in total dividends across its portfolio at a 4.16% annualized return rate with 92.50% occupancy. The platform has paid $4 million+ in cumulative cash dividends since launch. Past performance does not guarantee future results.
How Ark7 fills the TSP real estate gap
The TSP’s five-fund menu offers no REITs, property funds, or rental income options. Fractional real estate through Ark7 gives federal employees a way to invest in rental property income without taking a TSP loan (which carries separation-triggered repayment risk) or buying physical property (which requires active management and landlord duties). Each Ark7 property lists projected returns, actual rental income, occupancy rates, and expense breakdowns, giving investors the same level of transparency they would get from a TSP fund fact sheet.
Ideal for
- Federal employees who want direct real estate exposure without becoming landlords
- Investors seeking monthly dividend income from professionally managed rental properties
- Those who value property-level choice and want to select specific assets rather than pooled funds
- Federal employees who prefer regulated securities with a functioning secondary market
Getting started
Creating an Ark7 account takes under five minutes. Browse available properties, review each property’s financial projections and historical performance, and purchase shares starting at $20. Dividends begin accruing once properties are funded and tenants pay rent.
2. Fundrise
Fundrise offers the broadest diversification in the fractional real estate space, managing over $1 billion in assets across real estate, private credit, and venture capital, per Wikipedia’s Fundrise page. It is the most established platform in the category with 13+ years of operations, KPMG-audited financials, and SEC registration.
Key Features
- $10 minimum for standard accounts. The lowest barrier to entry in real estate investing, though investors select pooled funds rather than individual properties.
- Fund categories: eREITs (real estate), eFunds (private credit), and Innovation Fund (venture capital). Allows one-account access to multiple alternative asset classes.
- Performance: Fundrise delivered +5.75% in 2024 after a -7.45% return in 2023, demonstrating that real estate investments carry cyclical risk.
Pricing
Fundrise’s standard account minimum is $10, with $1,000 minimum for IRA accounts. The platform charges a 1% early redemption penalty for withdrawals within five years, and redemption requests are processed quarterly, meaning investors cannot access funds on demand during market volatility. Fundrise suspended redemptions in 2020 and again in 2022-2023 during real estate market downturns. Federal employees seeking real estate investing platforms for passive income may prefer property-level transparency and secondary market liquidity.
3. Arrived
Arrived provides fractional shares of single-family rental homes with curated property selection. Backed by Jeff Bezos and Marc Benioff, Arrived has attracted 974,000+ registered investors and $429 million in total capital invested.
Key Features
- Individual property selection. Investors browse and purchase shares of specific single-family rental homes.
- 3.9% average dividend yield with no appreciation guarantees. The dividend yield has at times trailed high-yield savings accounts.
- Secondary market launched in November 2025, providing limited liquidity after an initial holding period. The market is still maturing with limited trading volume.
Pricing
The fee stack is higher than the fractional real estate model when factoring in the annual AUM component. Vacation rental properties carry the highest management fees at 15-25%.
4. Lofty.ai
Lofty.ai takes a different approach to fractional real estate by using blockchain tokenization on the Algorand network, creating immutable ownership records for each property share, per ModernAlts’ Lofty review. The platform offers daily rental income distributions, a unique feature in the space.
Key Features
- Daily rental income distributions. The only major platform distributing income daily rather than monthly or quarterly.
- No lock-up periods. Share trading is available 24/7 on the secondary marketplace, though reviews note that liquidity is not as strong as advertised for larger positions.
- Zero ongoing fees. Lofty charges no management, performance, or advisory fees after the initial purchase.
- Blockchain transparency. All ownership records are recorded on the Algorand blockchain.
Pricing
Lofty charges a 2.5-3.5% purchase fee and a 3% seller fee with zero ongoing management fees. The platform has reached profitability with approximately $1.5 million in revenue. However, the California Department of Financial Protection and Innovation has banned new token purchases by California residents, per the DFPI Consent Order, creating regulatory uncertainty for the platform.
Platforms for Federal Employees to Evaluate Carefully
Not every investing platform fits the federal employee profile. Two platforms, CrowdStreet and RealtyMogul, carry constraints that make them less suitable for most federal employees, though they serve specific investor segments.
CrowdStreet
CrowdStreet provides access to institutional-quality commercial real estate deals with sponsor-managed properties across the U.S., per ModernAlts’ comparison. It requires accredited investor status ($200,000+ annual income or $1 million+ net worth) and a minimum investment of $25,000 per deal, with some offerings reaching $100,000. The Wall Street Journal reported that approximately 50% of CrowdStreet deals failed to meet target returns. The platform’s transparency rating is 1.8/5, and there is no secondary market. Investments are illiquid for the full hold period.
RealtyMogul
RealtyMogul offers public non-traded REITs starting at $5,000 for non-accredited investors alongside private placements starting at $25,000-$35,000 for accredited investors, per ModernAlts’ comparison. The platform was acquired by The Wideman Company in November 2025. Its Income REIT distribution was cut from 6% to 3% annualized, and the net asset value declined approximately 32%, from $11.00 to $7.49 per share, per RealtyMogul SEC filings. RealtyMogul’s Trustpilot rating is 1.5/5, with multi-year redemption complaints from investors unable to withdraw funds.
Smart Stacking Strategy: TSP, IRA, HSA, and Real Estate
The stacking strategy for federal employees follows five prioritized steps: maximize the TSP to the 5% match, max a Roth IRA ($7,500 in 2026), max remaining TSP to the $24,500 cap, contribute to an HSA, and then use taxable brokerages or fractional real estate for additional diversification. Each step layers tax advantages while filling asset-class gaps the TSP cannot cover.
| Step | Action | Rationale |
|---|---|---|
| 1 | Contribute 5% to TSP | Capture full agency match (100% immediate return) |
| 2 | Max Roth IRA ($7,500/yr) | Greater investment flexibility and tax-free growth |
| 3 | Max remaining TSP ($24,500 cap) | Tax-deferred or Roth growth at 0.05% ER |
| 4 | Contribute to HSA ($4,400/$8,750) | Triple tax advantage on health savings |
| 5 | Taxable brokerage or fractional real estate | Diversification, passive income, real estate exposure |
Sources: TSP Bulletin 25-3 (TSP limits), IRS IR-2025-111 (IRA limits), IRS Rev. Proc. 2025-19 (HSA limits).
The HSA deserves special attention for federal employees on High Deductible Health Plans. In 2026, the self-only limit is $4,400 and the family limit is $8,750, per the IRS Revenue Procedure 2025-19. HSAs offer a triple tax advantage: pre-tax contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. Many federal employees treat the HSA as a supplemental retirement account, paying medical expenses out of pocket and letting the HSA grow tax-free for decades.
Real estate sits at the top of the stacking order because it is the asset class the TSP cannot access. Federal employees can learn how to invest in real estate with minimal capital through fractional platforms. Fractional real estate platforms like Ark7 allow federal employees to add rental property income to their portfolio without taking TSP loans (which carry separation-triggered repayment risk) or buying physical property (which requires active management).
The federal employee hybrid strategy often looks like this: keep the G Fund allocation inside the TSP for its unique yield-without-risk profile, roll growth assets to an IRA at a low-cost brokerage for more investment options, and use fractional real estate platforms to fill the real estate gap.
Final Verdict
Federal employees have one of the strongest retirement systems in the country: a TSP with 0.05% expense ratios, a FERS pension with a lifetime inflation-adjusted annuity, and Social Security. The TSP’s five-fund menu and low costs make it the right foundation for every federal employee’s investment strategy.
The gap is real estate. The TSP offers no REITs, property funds, or rental income options. Fractional real estate platforms give federal employees a way to access property income without the responsibilities of being a landlord or the risks of a TSP loan.
For federal employees considering real estate exposure outside the TSP, Ark7 offers fractional shares of individual rental properties starting at $20 with monthly dividend distributions, zero AUM fees, and a regulated secondary market. The platform handles property management and provides property-level financial transparency that lets investors make informed decisions about which properties to invest in.
Fidelity, Schwab, and Vanguard remain solid options for taxable brokerage accounts that can replicate TSP fund exposure at lower expense ratios. The right approach for each federal employee depends on their individual financial situation, retirement timeline, and goals.
Frequently Asked Questions
Can federal employees use Robinhood alongside their TSP?
Yes. Federal employees can open a Robinhood account in addition to their TSP. Robinhood offers a 3% IRA contribution match on transferred balances and $0 options trading with Robinhood Gold ($60/year). The platform is best suited as a secondary brokerage for younger federal employees who want a mobile-first investing experience. Standard federal ethics rules regarding outside investments apply.
What is the FERS pension and how does it affect investing?
The Federal Employees Retirement System (FERS) provides a lifetime inflation-adjusted annuity based on years of creditable service and high-3 average salary. Because FERS provides guaranteed retirement income similar to a bond, federal employees can allocate their TSP more aggressively toward stocks and real estate than private-sector workers without a pension. FERS also includes a Special Retirement Supplement that provides bridge income for employees who retire between ages 57 and 62.
Can federal employees invest outside the TSP?
Yes. The TSP does not offer any real estate investment options, including REITs, property funds, or rental income vehicles. Federal employees are free to invest in real estate outside the TSP through fractional platforms, REITs, real estate ETFs at brokerages, or direct property ownership. Fractional platforms are popular because they require no landlord duties, offer $20 minimums, and provide monthly dividend income without property management responsibilities.
What federal ethics rules apply to outside investing?
Federal employees must comply with the Standards of Ethical Conduct (5 C.F.R. Part 2635) and agency-specific supplemental rules. Generally, federal employees may own diversified investments including fractional real estate shares, mutual funds, and ETFs as long as they do not create conflicts of interest with their official duties. Employees should consult their agency ethics official before making investments that could relate to their agency’s mission, particularly for DoD, HUD, and financial regulatory agency employees.
What is the TSP G Fund and why is it unique?
The G Fund invests in short-term U.S. Treasury securities and pays interest at intermediate-term rates with no principal risk. No private-sector platform offers a product with this yield-without-risk profile. The interest accrues daily, and the principal is guaranteed by the U.S. government. Federal employees should consider keeping their bond allocation in the G Fund within the TSP rather than moving it to a private-sector bond fund.
How does the secondary market work for fractional shares?
SEC-registered secondary markets allow investors to sell their fractional shares to other buyers after a required holding period. The secondary market provides access to the PPEX ATS via North Capital, a regulated alternative trading system. In May 2026, 31 properties (70% of the portfolio) were actively trading on the secondary market, which processed $325,150 in monthly transactions. Secondary market liquidity means investors are not locked into a property for the full hold period.
What order should federal employees invest in?
The standard five-step stacking order for federal employees is: 1) contribute 5% to the TSP to capture the full agency match, 2) max a Roth IRA ($7,500 in 2026) for tax diversification, 3) max remaining TSP deferrals up to the $24,500 cap, 4) contribute to an HSA (triple tax advantage), and 5) use a taxable brokerage or fractional real estate platform for additional diversification. Each step layers tax advantages while filling asset-class gaps the TSP cannot cover.
What are the 2026 TSP changes?
Multiple SECURE 2.0 provisions took effect in 2026. The contribution limit rose to $24,500 (up from $23,500), with catch-up contributions of $8,000 for ages 50-59 and 64+, and enhanced catch-up of $11,250 for ages 60-63. High earners with prior-year wages exceeding $150,000 must make catch-up contributions as Roth rather than traditional pre-tax. Roth in-plan conversions launched January 28, 2026, allowing participants to convert Traditional TSP balances to Roth TSP directly through My Account without an IRA rollover.
Should federal employees use TSP or an IRA?
Use the TSP first, then layer in a Roth IRA. The TSP wins on fees (0.05% blended ER), higher contribution limits ($24,500 in 2026), agency matching (5%), and the unique G Fund. But an IRA wins on investment flexibility, with thousands of stocks, ETFs, and REITs versus the TSP’s limited five-fund menu. Most federal employee strategies use both: max the TSP to the match, contribute to a Roth IRA for tax diversification, then max remaining TSP deferrals.
What’s better: Roth TSP or Roth IRA?
A Roth IRA offers more flexibility, while the Roth TSP offers higher contribution limits. Roth IRA contributions (but not earnings) can be withdrawn anytime penalty-free, making it a better emergency fund backup. The Roth TSP allows contributions up to $24,500 plus catch-ups, far exceeding the IRA’s $7,500 limit. Since SECURE 2.0 eliminated lifetime RMDs on Roth TSP balances (2024), the gap between them narrowed. The optimal strategy for most federal employees: fund a Roth IRA for flexibility after capturing the TSP match, then use the Roth TSP to maximize tax-free growth with higher limits.
Should I roll over my TSP to an IRA at retirement?
Usually only a partial rollover makes sense. A full rollover means losing access to the G Fund, which pays intermediate-term interest with zero principal risk, a product no private-sector platform offers. The TSP also provides the Rule of 55, allowing penalty-free withdrawals if you separate at age 55 or older, plus superior creditor protection under federal law. The recommended split strategy: keep the G Fund allocation in the TSP, roll the growth allocation (C/S/I funds) to an IRA at Fidelity or Vanguard for lower fees on stock funds and flexible withdrawals.
Disclaimer: This article is for educational and informational purposes only and does not constitute financial advice. Past performance does not guarantee future results. All investments carry risk, including the potential loss of principal. Federal employees should consult a licensed financial advisor and their agency ethics official before making investment decisions.
